Feebates ‘dent’ used-car prices

Clean car discount has “downward influence” but overall inflation hits its highest level in more than three decades.

Posted on 19 July, 2022

The government’s clean car discount scheme has been a factor in pushing down the average price of used cars, according to latest figures from Stats NZ.

Figures show the price of used cars in the June quarter fell 1.5 per cent compared with the first three months of the year. In contrast prices increased 2.9 per cent for new vehicles.

It comes despite annual inflation hitting a 32-year-high of 7.3 per cent in the June quarter when compared with the same period a year ago. The surge follows a 6.9 per cent increase in the March quarter.

However, compared with the June quarter of 2021, the price of used cars rose 6.3 per cent and a more modest 0.7 per cent for new.

Stats NZ notes clean car policies had a “small downward influence on prices for second-hand cars” in the latest quarter, with more vehicles in its sample receiving rebates than incurring fees under the discount scheme.

The main driver for the rise in annual inflation was the housing and household utilities group, due to increasing prices for construction and rentals for housing.

Prices to build new dwellings soared 18 per cent in the June quarter compared with the same spell a year ago.

The next biggest contributor to inflation was higher prices for petrol and diesel, which increased 32 per cent and 74 per cent respectively over the year, while the purchase of vehicles climbed by four per cent.

The CPI rose 1.7 per cent in the June quarter compared with the March quarter, again mainly because of housing and household utilities.

Transport was also a key factor as the average price of one litre of 91 octane petrol rose 6.3 per cent to $2.84 in the June 2022 quarter, compared with $2.67 in the March 2022 quarter.

The average price of one litre of diesel increased 30 per cent to $2.57, compared with $1.98.

Stats NZ adds the quart-o-quarter rise in transport was partly offset by falling prices for second-hand cars, road passenger transport, international airfares, rail passenger transport and other private transport services, which includes road user charges.